States heading off deadbeats at casinos

States heading off deadbeats at casinos
By Bill Ruthhart
Chicago Tribune

Slot machines are one of the gaming options at the new Rivers Casino in Des Plaines, Illinois, as seen June 9, 2011. A growing number of states have passed laws forcing casinos to intercept the winnings of deadbeat parents who owe child support, but not Illinois. (Keri Wiginton/Chicago Tribune/MCT)

Map of the U.S. showing states that intercept child support from casino winnings; includes charts showing top 10 states for uncollected child support payments. Chicago Tribune 2011


CHICAGO – Hundreds of gamblers have stood outside the casino cage, adrenaline still pumping from their big win, only to be told the thousands of dollars they are there to collect have been confiscated – for their kids.

A growing number of states have passed laws forcing casinos to intercept the winnings of deadbeat parents who owe child support, but not Illinois.

Efforts to start a similar system here have been stopped cold – not only by the powerful casino lobby, but by the state agency that collects child support, which has voiced concerns over how such a program would be implemented.

In four states that already have chosen to withhold winnings from parents who owe child support, the Chicago Tribune found the systems have proven effective, collecting nearly $3 million while creating few hassles for casinos.

Some parents have repeatedly had their jackpots taken, including one in Colorado whose winnings have been seized 11 times, officials say.

“These people are taking their kids’ money and they are throwing it in a slot machine,” said Joel Judd, a former Colorado legislator who authored the country’s first casino child support law. “They are putting a lot of money into these machines and games over a long period of time, and it’s not their money.

“I’m glad we found a way to collect it.”

It wasn’t easy.

For five years, Colorado’s casinos fought off the legislation until Judd pushed it through in 2007.

He got the idea while working as a Denver attorney. One of his clients was awarded restitution in a court case, and the woman who owed the money won $5,000 at a casino. Judd said when he tried to collect for his client, the woman already had spent the money.

Realizing there was an even more widespread problem with deadbeat parents, he started pressing for casinos to check for child support debts when a gambler cashes out.

Since the law took effect in July 2008, Colorado has seized winnings 810 times for a total of $1.25 million, according to state child support figures.

The law requires casinos to check gamblers who win $1,200 at a slot machine – the same threshold where a winner has to fill out a federal tax form. Table game winners only fill out forms if they win with a hand at extreme odds – at least 300-to-1 – and collect more than $600.

If a gambler meets those criteria, a casino employee types the winner’s social security number into a state computer system to see if there is a match. If the winner owes, the system tells the casino how much to confiscate.

Colorado made its first collection the day the law was implemented. In 2008, it reeled in more than $500,000 while it has averaged $336,000 each of the last two years.

The state’s largest intercept to date was for more than $35,000, and one gambler had his winnings confiscated by casinos six times for a total of $44,100, said Paula Brown, a child support official who administers the program.

One Colorado man has had 11 different casino jackpots totaling more than $15,000 sent to his children.

Indiana Gov. Mitch Daniels called for a similar program in 2010, and in its first year the state has collected winnings 382 times for $736,000.

One parent had $18,500 confiscated, and 40 gamblers have had jackpots garnisheed multiple times.

“It’s happened over and over with some people, where they hit big and whatever they win is minus the child support,” said Ann Houseworth, a spokeswoman for the Indiana Department of Child Services. “Sometimes they get some money, sometimes it’s pennies, sometimes it’s nothing, but they keep coming back.

“It just shows you what their priorities are.”

Many states – including Illinois – already check lottery winners to ensure they do not owe child support.

That’s what led Gary Peterlin to push for a similar check at casinos in 2005. Then a member of the Illinois Gaming Board, he approached state Rep. Patricia Bellock, R-Hinsdale, about introducing a bill.

Peterlin, a LaSalle County attorney, and Bellock met with casino representatives and state child support officials, but the concept failed.

“I ran into a lot of resistance,” Bellock said. “The riverboat companies were all over it. All I seemed to get was opposition.”

And not just from the casinos.

Child support officials opposed the concept, citing concerns about red tape and making a computer database available to the casinos, Bellock and Peterlin said.

“The child support folks’ issues weren’t presented in a way that suggested it would be a big problem,” Peterlin said. “I was shocked they weren’t gung ho about it.”

The same opposition developed again this March when Rep. Naomi Jakobsson, D-Urbana, proposed a bill that would have required horse tracks and casinos to check winners for owed child support.

It died in a committee hearing, where not only track and casino owners lined up to oppose it, but also two officials from the state agency charged with collecting child support.

Representatives of that agency, the Department of Healthcare and Family Services, did not detail their concerns at the time.

When asked recently why the state opposed collecting child support at casinos, spokesman Mike Claffey said that the agency supports “the concept.”

“We just have concerns about specifics,” he said. “The issues aren’t insurmountable.”

Why the state opposed the legislation instead of remaining neutral on the bill or working to improve it remains unclear.

Claffey said last week that the agency was concerned that a casino child support system could be “too labor intensive” and that the bill did not specify whether checks would be done online or whether state workers would have to field phone calls from casinos.

Illinois already uses similar computer systems to deny lottery winnings, fishing and hunting licenses and driver’s licenses to people who owe child support, or in some cases, other financial debts.

Claffey, however, said those systems could not be used. For example, the database checked by clerks at retail locations before issuing fishing and hunting licenses can identify other problems in addition to child support debt. Lottery winners, however, are searched on a secure system located in state offices.

The state also was worried about a provision in the bill requiring casinos to hold confiscated winnings for 10 days, Claffey said, pointing to federal rules requiring child support money to be distributed within 48 hours.

“We want to work on this,” he said. “We want the bill to have specifics we are able to support and carry out.”

Illinois casinos have their own set of concerns.

Tom Swoik, executive director of the Illinois Casino Gaming Association, said other industries are not expected to carry out duties the state normally handles.

Some lawmakers agree.

“I do not like putting a burden on private industry to regulate them to do something like this,” state Rep. Jil Tracy, R-Mount Sterling, said this spring before voting against the bill.

Swoik said if the casinos are expected to collect child support, they need to have a real-time, electronic data on what parents owe, so money isn’t collected at the casino after a debt has been settled.

Setting up such a system has proven difficult in two states.

West Virginia and Mississippi have the power to intercept casino winnings from deadbeat parents, but have yet to develop a system.

Colorado spent $300,000 for programming to launch its system, which has worked so smoothly the state has expanded its checks to other areas – court-ordered restitution, income taxes, defaulted student loans, even parking tickets on state property.

In the last year, Iowa has collected $820,000 in child support at casinos, but also has roped in money owed on student loans and debts owed to county clerks, said Carol Eaton, chief of the Iowa Bureau of Collections.

In Indiana, casinos fought child support collections, but the process has run smoothly, said Mike Smith, director of the Casino Association of Indiana.

Still, he said, casinos have had to make more than 200,000 checks to score the 382 hits of parents who owed money, a computer process he called time consuming. Smith said the casinos are working with the state to develop a faster system where workers would only have to swipe a winner’s driver’s license on a computer to determine if they owe child support.

Lois Rice, executive director of the Colorado Gaming Association, said the child support checks have not turned out to be nearly as troublesome as her casino group feared when it opposed the law.

“We have customer service issues once in a while, where people are held up at the cage,” Rice said. “But overall, it’s been pretty smooth.”

This month, Louisiana became at least the fifth state to collect child support at casinos, adding to a growing movement nationwide – momentum Illinois’ casinos can’t ignore, some officials say.

“This is one of those motherhood and apple pie deals,” said Swoik, who represents the state’s 10 casinos. “As more and more states are doing it, we can see at some point it would occur here.”

The issue is likely to come up again in next year’s legislative session, and Bellock said, “it’s time to bring it forward again.”

Peterlin, who first pitched the idea in Illinois, said he hopes Illinois casinos start collecting soon.

“If people who should be paying child support are out gambling, it’s ridiculous that their winnings wouldn’t be applied to the debts they owe their children,” he said. “To me, it’s a no-brainer.”